The US could impose even stricter sanctions on Huawei & SMIC

The Huawei Mate 60 series launch managed to rock the boat in the US. That smartphone comes with a 7nm processor, and the US doesn’t believe Huawei managed to avoid the sanctions. Republicans are actually demanding even stricter sanctions on Huawei and SMIC, the company that made the chip for Huawei.

The US could impose even stricter sanctions on Huawei & SMIC

Digitimes’ Research senior analyst, Luke Lin, believes the US could issue even stricter sanctions on Huawei. The company actually launched this device during the US Secretary of Commerce Gina Raimondo’s visit to China. Was that planned, we don’t know, but the timing is impeccable.

Some see this as Huawei’s statement on self-sufficiency, actually. Lin actually says that the US issued its sanctions “too late and made them too lenient”, which is why Huawei managed to do what it did.

Luke Lin actually went on to explain the situation. SMIC purchased the immersive DUV equipment capable of processes under 14nm between 2018 and 2020. The US issued a ban on SMIC regarding sub-10nm process equipment in 2020, but that was too late, it seems.

Since 2020, China actually continued to import more immersive DUV equipment, and that equipment is one of the key reasons Huawei was able to produce 5G chips with the 7nm process. Qualcomm and other US companies lobbied with the US to be more lenient with its sanctions, as they didn’t want to lose Huawei as a customer, so that played a role in everything too.

Huawei was on the path to become world’s number one smartphone OEM, prior to sanctions

This story is far from over, of course. Huawei was hurt by the US sanctions quite a bit. It was on the path to becoming the world’s number 1 smartphone manufacturer, but things drastically changed after the ban. Huawei is doing its best to return to its former glory in the smartphone market, but it hasn’t been easy. It’s not only limited from the hardware standpoint, but the software too, as it can’t use Google services.

Huawei created its own ecosystem based on Android, and it actually did a really good job with it. Still, it’s not the same. The company is constantly making progress on both hardware and software fronts, so it remains to be seen what will happen going forward.

If Huawei chips manage to achieve a good enough yield rate to be exported overseas, they’ll manage to hurt the US companies even more in the long term.

Huawei is allegedly getting $30 billion in state funding to build a secret network of wafer fabs across China. This is based on a previous report by Bloomberg, as DigiTimes notes.

Lin notes that, in order to prevent a production scale-up, the US sanctions “will need to target chip-making equipment and consumable materials”. Lin also notes that, in order for sanctions to be truly effective, the US should prohibit equipment from entering China at all, and not just restrict sales to Huawei. It remains to be seen what will happen from this point on.